Construction Law Updates

Buyer Beware

No. 1005 – 1 October 2010

In a recent decision of the Supreme Court of South Australia, the Court was asked to decide whether the builder would be liable to the subsequent owner even if the defects complained about would have been apparent at the time of purchase from the original owner.

Blame it on the subbie

No. 1004 – 1 September 2010

A recent decision of the NSW Supreme Court (Owners Corporation v Dasco Constructions) raises the interesting question whether residential builders are liable to subsequent owners for defective work performed by their subcontractors.

Demolish or rectify?

No. 1003 – 1 June 2010

If a builder has made errors that cannot be completely removed without demolishing the works and starting again, does it have to demolish and rebuild or can compensation be assessed in some other way? The Full Court of the Supreme Court recently examined this question in Unique Building Pty Ltd v Brown.

Terminating Trouble

No. 1002 – 1 March 2010

The termination of a contract is a serious step with long term implications. Minor differences in the form and substance of the documents used in termination can lead to substantially different legal outcomes.

How will the New Law on progress payments work?

No. 1001 – 1 February 2010

Late last year, the South Australian Parliament passed the Building and Construction Industry Security of Payment Bill 2009 (the “New Law”). The New Law dramatically changes the ground rules on timing and liability for responding to payment claims in the construction industry.

Who is liable when one subcontractor negligently injures another?

No. 906 – 1 October 2009

Recently, in Leighton Contractors v Fox the High Court of Australia revisited the issue of liability of the head contractor for injury to an independent subcontractor caused by the negligent conduct of another subcontractor.

Is inserting “nil” enough to avoid delay damages?

No. 905 – 1 September 2009

Recently, in J-Corp v Mladenis the WA Court of Appeal was asked whether a clause limiting liquidated damages to “NIL” prevented the owners from claiming general damages for delay when the builder ran late finishing their home.

Can an owner successfully sue a subcontractor in negligence?

No. 904 – 1 August 2009

A recent Victorian Supreme Court decision illustrates the dilemma faced by subsequent owners of a defective building when a subcontractor is thought to have negligently caused damage.

More than the contract price?

No. 903 – 1 July 2009

A party who breaches a contractual condition may render itself vulnerable to a claim that it has repudiated the contract. When a party is issued with a notice to “show cause” as to why a contract should not be terminated, it should seek legal advice and act accordingly.

The Dream Appeal

No. 902 – 15 February 2009

In Update 805 we reported on a Supreme Court of South Australia decision in relation to a pre-purchase building inspection report and noted that leave to appeal had been granted. The Full Court recently handed down its decision on the appeal.

Filling in the contract form

No. 901 – 1 February 2009

Standard form contracts are widely used in the construction industry because they provide a ready to use and economical written contract that is familiar to the parties. Recently, in Sizer v Squarcini, the WA Supreme Court examined how to interpret the standard form contract known as AS2124-1992 where the parties had used inconsistent language when completing the contract.

It may sound unfair but it’s the law

No. 808A – 15 December 2008

Where companies are in their sunset period, it is not acceptable to apply pressure to jump the payment queue. The law seeks to distribute the remaining assets fairly to all creditors.

Summary of the law relating to Unfair Preferences

No. 808 – 1 December 2008

When a company makes a payment shortly before it is placed into liquidation, the liquidator may in certain circumstances claw back that payment for the benefit of creditors generally. Such a claim brought by a liquidator is called an “unfair preference” claim.

Collecting the cash

No. 807 – 1 November 2008

Statutory demands are powerful tools in collecting cash where there is no dispute that money is owed. Even if there are competing claims and counterclaims, the Court can decide there is no dispute about a portion of the amount and refuse to set aside the demand for the undisputed amount. Statutory demands can be served for amounts in excess of $2,000.

Calling on the guarantee

No. 806 – 1 September 2008

Performance guarantees are virtually blank cheques in the hand of the owner unless there are clear words in the contract and the guarantee that restrict the right of the holder to call upon the guarantee.

The Dream Client

No. 805 – 1 August 2008

Building consultants need to be aware of the requirements of AS4349 and ensure that they comply with them, or deal with them in their contract. AS4349 is now the benchmark for the common law duty of care of inspectors.

Does the Superintendent have to be fair?

No. 804 – 1 July 2008

A recent Queensland Supreme Court Decision examines the role of the Superintendent where the building contract has been amended to give the Superintendent an absolute discretion and does not require the Superintendent to act fairly and honestly.

Summary judgment on architect’s certificates

No. 802 – 1 April 2008

Standard form contracts are commonly used in the building and construction industry. This case highlights one of the great advantages of using standard form contracts – that of relative certainty.

What is practical completion?

No. 801 – 1 February 2008

A recent decision of the District Court of South Australia ([2007] SADC 137) provides an interesting insight into the legal meaning of the term “practical completion” as applied to a residential housing contract.

Adjudication News

No. 710 – 1 December 2007

In the last 10 years or so, adjudication has been widely accepted in the construction industry around the world as a means of resolving payment disputes during construction. South Australia is now the only mainland Australian State without adjudication legislation.